Zipcar is about to face an unlikely new competitor

A classic Citroën DS.
REUTERS/Charles Platiau
Europe's second largest automaker PSA Peugeot Citroën Group announced on Tuesday has big plans to return to the US.

But the company won't be selling cars — at least not yet. Instead, the brand will start with a ride-sharing experience similar to Zipcar.

"We will come back to North America because it is a place where we believe we can make a significant profit," PSA Group CEO Carlos Tavares said in a recent presentation.

The automaker — which produces cars under its Peugeot, Citroën, and DS brands — has been absent from the US since 1991.

Citroën, known for its innovative, comfortable, and quirky cars such as the 2CV and the SM, left the US market in 1974 while recently launched DS has never been offered for sale here.

PSA's return to North America is part of its newly announced "Push to Pass" initiative which includes investing in mobility and ride-sharing enterprises similar to Zipcar.

PSA aims to increase its revenue by 25% over the next five years.

According Tavares, PSA's return to the continent will take place in three phases over the next 10 years.

Initially, PSA's presence in the US will be purely as a ride-sharing operator similar to Zipcar. If that venture is successful, then the company will introduce its own cars to the ride-sharing fleet.

Peugeot RCZ R.
Peugeot
Should North American consumers take to PSA's cars in the ride-sharing programs, the company would then consider entering the market as a traditional automaker.

Tavares believes that approaching the US market as a mobility operator gives the company the chance to better understand the needs and the tastes of domestic consumers. It also allows the company to re-introduce PSA to the public without the massive upfront investments associated with launching new car brands.

In addition, the North American auto market — and the US market in particular — is about as competitive as it has ever been. Having spent time running Nissan's North American business, Tavares is well aware of how difficult it is gain market share.

The recent re-introduction of Fiat and Alfa Romeo in the US has, thus far, failed to make a significant impact on the market and it is likely PSA will face similar challenges should they choose to re-enter the market in the near future.